Correlation Between Oron Group and Migdal Insurance

Can any of the company-specific risk be diversified away by investing in both Oron Group and Migdal Insurance at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Oron Group and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oron Group Investments and Migdal Insurance, you can compare the effects of market volatilities on Oron Group and Migdal Insurance and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Oron Group with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oron Group and Migdal Insurance.

Diversification Opportunities for Oron Group and Migdal Insurance

0.94

Correlation Coefficient

Oron Group  Migdal Insurance

Almost no diversification

The 3 months correlation between Oron and Migdal is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Oron Group Investments and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Oron Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Oron Group Investments are associated (or correlated) with Migdal Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Migdal Insurance has no effect on the direction of Oron Group i.e., Oron Group and Migdal Insurance go up and down completely randomly.

Pair Corralation between Oron Group and Migdal Insurance

Assuming the 90 days trading horizon Oron Group Investments is expected to generate 1.14 times more return on investment than Migdal Insurance. However, Oron Group is 1.14 times more volatile than Migdal Insurance. It trades about 0.58 of its potential returns per unit of risk. Migdal Insurance is currently generating about -0.09 per unit of risk. If you would invest  92,000  in Oron Group Investments on September 30, 2024 and sell it today you would earn a total of  10,500  from holding Oron Group Investments or generate 11.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Oron Group Investments  vs.  Migdal Insurance

Oron Group Investments

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oron Group Investments are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Oron Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Migdal Insurance

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Migdal Insurance are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Migdal Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oron Group and Migdal Insurance

The main advantage of trading using opposite Oron Group and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oron Group position performs unexpectedly, Migdal Insurance can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Migdal Insurance will offset losses from the drop in Migdal Insurance's long position.

The idea behind Oron Group Investments and Migdal Insurance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..